Strategic Sourcing Exam Preparation Guide
Course Introduction
Strategic Sourcing explores the processes and methodologies organizations use to identify, evaluate, and engage suppliers that can best meet their strategic objectives. The course covers topics such as spend analysis, supplier relationship management, negotiation tactics, risk assessment, cost modeling, and the development of sourcing strategies to achieve competitive advantage. Students will analyze case studies, learn how to align sourcing decisions with overall business goals, and discuss the impact of globalization, technology, and sustainability in sourcing practices. Through practical assignments and industry insights, the course prepares students to make informed and strategic procurement decisions in complex business environments.
Recommended Textbook
Purchasing and Supply Chain Management 5th Edition by Robert M. Monczka
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2
Chapter 1: Introduction to Purchasing and Supply Chain Management
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Sample Questions
Q1) Virtually all of the features that make their way into final products originate with suppliers.
A)True
B)False
Answer: False
Q2) The knowledge and skills demanded of today's supply chain professional has not changed and is the same as before.
A)True
B)False
Answer: False
Q3) An abundance of competitors and choices have conditioned customers to want higher quality,faster delivery,and products and services tailored to their individual needs albeit at a higher total cost.
A)True
B)False
Answer: False
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Chapter 2: The Purchasing Process
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Sample Questions
Q1) Almost all firms establish blanket purchase orders with their suppliers.
A)True
B)False
Answer: True
Q2) The objectives of a world-class purchasing organization do not need to move far beyond the traditional belief that purchasing's primary role is to obtain goods and services in response to internal needs.
A)True
B)False
Answer: False
Q3) In the ____ approach,purchasing must work with the end user to quickly identify a supplier to provide products on short notice at the lowest possible cost with an acceptable level of quality and delivery time.
A) spot buy
B) long term agreement
C) P2P
D) e-procurement
E) None of these choices.
Answer: A
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Page 4
Chapter 3: Purchasing Policy and Procedures
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Sample Questions
Q1) Buyers do not need to consider a supplier's ability to comply with environmental regulations as a condition for selection.
A)True
B)False
Answer: False
Q2) Which of the following is not a best practice for inclusion in any minority supplier development initiative?
A) Ensure that all minority suppliers are located nearby the organization's facilities.
B) Mandate Tier-I suppliers to have a Tier-II diversity spend goal and incorporate the terms in the contracts.
C) Include minority suppliers in all RFQs without exception.
D) Tie the goals and objectives of the supplier diversity program to supply chain management strategies and supply chain job functions.
E) Incorporate all corporate functions in which suppliers are selected and procurement commitments are made.
Answer: A
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Chapter 4: Supply Management Integration for Competitive Advantage
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Sample Questions
Q1) The sharing of technology roadmaps often strongly influences the type of buyer-supplier relationship that results in the integration process.
A)True
B)False
Q2) In collaboration,the relationship is bilateral; both parties have the power to shape its nature and future direction over time.
A)True
B)False
Q3) Management can exert subtle control over a team's tasks through all of the following except ____.
A) authorizing the creation of the sourcing team
B) selecting the team's task
C) selecting the team leader and members
D) conducting performance reviews and holding teams accountable for performance outcomes
E) sitting in on all team meetings
Q4) Closer relationships interest all suppliers.
A)True
B)False
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Chapter 5: Purchasing and Supply Management Organization
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Sample Questions
Q1) In organizations where new product development occurs at the divisional or business unit level,a centralized purchasing structure can support new product development at earlier stages.
A)True
B)False
Q2) When a key commodity is purchased by many major business units,use of [a/an] ____ is beneficial.
A) joint global strategy
B) purchasing cards
C) decentralized purchasing structure
D) corporate purchasing council
E) lead division buying
Q3) ____ refers to the assumption that local personnel understand and support the objectives of the business unit or division and feel a personal commitment to a particular operation.
A) Centralization of purchasing authority
B) Hybrid structure
C) Correlation
D) Specialization
E) Ownership
Page 7
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Chapter 6: Supply Management and Commodity Strategy Development
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Sample Questions
Q1) A supplier catalog allows users to order directly through the Internet using a company procurement card with the delivery made directly to the site the next day.
A)True
B)False
Q2) Supply base optimization usually refers to increasing the number of suppliers used.
A)True
B)False
Q3) More complex logistics and currency fluctuations require measuring all relevant costs before committing to a worldwide source.
A)True
B)False
Q4) Which of the following is not one of Porter's five forces?
A) Buyer bargaining power.
B) Switching costs.
C) Threat of new entrants.
D) Market internal competition.
E) Supplier bargaining power.
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Chapter 7: Supplier Evaluation and Selection
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Sample Questions
Q1) An in-depth evaluation of all potential supply sources should be conducted for every purchase.
A)True
B)False
Q2) Progressive firms are working to increase the length of their purchase contracts.
A)True
B)False
Q3) Certain suppliers who may present the lowest cost seldom present greater risks.
A)True
B)False
Q4) Which of the following is not a method used to further evaluate and select suppliers once the initial evaluation has taken place?
A) Evaluation from supplier-provided information.
B) Supplier visits.
C) Use of preferred suppliers.
D) Trade journals.
E) External or third party information.
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Chapter 8: Supplier Quality Management
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Sample Questions
Q1) Working with more suppliers allows the supply manager to concentrate on building trusting,collaborative relationships and supplier loyalty while improving quality in purchased goods and services.
A)True
B)False
Q2) Deming's 14 points are an a la carte menu of quality improvement activities from which a company can pick and choose only those with which they agree.
A)True
B)False
Q3) Reliance on a firm's suppliers for raw materials,components,subassemblies,and even finished products is steadily decreasing.
A)True
B)False
Q4) To remain current,ISO 9000:2008 registration must be accomplished every ____.
A) 6 months
B) 12 months
C) 2 years
D) 3 years
E) 5 years
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Chapter 9: Supplier Management and Development:
Creating a World-Class Supply Base
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Sample Questions
Q1) Which of the following is not a typical supplier development activity?
A) Providing incentives to suppliers for improved performance.
B) Promoting competition among suppliers.
C) Raising prices paid for purchased goods and services.
D) Directly involving buyer personnel with suppliers.
E) Conducting training and process improvement initiatives.
Q2) Which of the following is not one of the advantages of a rationalized and optimized supply base?
A) Buying from world-class suppliers.
B) Use of full-service suppliers.
C) Lower supply base administrative costs.
D) Reduction of supply base risk.
E) Absence of competition.
Q3) Supply base rationalization and optimization often involves eliminating those suppliers who are unwilling to achieve (or are incapable of achieving)supply management performance objectives,either currently or expected in the near future.
A)True
B)False
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Chapter 10: Worldwide Sourcing
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Sample Questions
Q1) International purchasing does not create additional costs that are not part of domestic purchasing.
A)True
B)False
Q2) Sharing currency fluctuation risk with a supplier works best on items that have a set delivery date such as with capital equipment.
A)True
B)False
Q3) In order to gain access to the lowest costs,cutting-edge technology,and best capabilities,organizations must scan the global landscape in search of the best suppliers.
A)True
B)False
Q4) The use of a full-service trading company may actually result in a lower total cost for international purchases compared with performing each activity individually.
A)True
B)False
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Chapter 11: Strategic Cost Management
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Sample Questions
Q1) In the ____,the desired profit is added to the estimated costs.
A) penetration pricing model
B) revenue pricing model
C) margin pricing model
D) rate-of-return pricing model
E) TCO model
Q2) All of the following are examples of total cost of ownership categories except ____.
A) purchase price
B) acquisition costs
C) sales, general, and administrative overhead costs
D) usage costs
E) end of life costs
Q3) In the case of capital equipment,____ are all costs associated with operating the equipment during its life.
A) usage costs
B) end of life costs
C) opportunity costs
D) acquisition costs
E) training costs
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Page 13
Chapter 12: Purchasing and Supply Chain Analysis: Tools and Techniques
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Q1) There is a strong correlation between effective planning and successful project outcomes.
A)True
B)False
Q2) The learning curve requires the accurate collection of cost and labor data,particularly during the latter stages of production.
A)True
B)False
Q3) The work force factor of the learning curve refers to the ability of the worker on the job to learn and improve through repetitive effort and increased efficiency but not the effort by management to pursue productivity gains.
A)True
B)False
Q4) In a PERT network,which of the following is not one of the times shown?
A) Early start.
B) Late start.
C) On time start.
D) Early finish.
E) Late finish.
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Chapter 13: Negotiation and Conflict Management
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Sample Questions
Q1) ____ involves inventing new options that satisfy each party's needs.
A) Expand the pie
B) Find a bridge solution
C) Logroll
D) Cut the costs for compliance
E) Use non-specific compensation
Q2) ____ is a negotiation tactic that is a test of acceptability.
A) Take-it-or-leave-it
B) Best and final offer
C) Price increase
D) Trial balloon
E) Honesty and openness
Q3) Linking issues risks undermining an entire negotiation if the parties reach an impasse on a single issue within the proposed package.
A)True
B)False
Q4) Effective negotiators are unwilling to make counterproposals.
A)True
B)False
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Chapter 14: Contract Management
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Sample Questions
Q1) If the client company does not withhold income taxes,a consultant will normally be viewed as an employee,not as an independent contractor.
A)True
B)False
Q2) In the firm fixed price contract,the price stated in the agreement does not change,regardless of fluctuations in general overall economic conditions,industry competition,levels of supply,market prices,or other environmental changes.
A)True
B)False
Q3) The choice of contract type is independent of the nature of the buyer-supplier relationship.
A)True
B)False
Q4) Purchasers cannot rely on an arbitration clause contained in their forms,particularly if the suppliers' forms do not contain such a clause.
A)True
B)False
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Chapter 15: Purchasing Law and Ethics
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Q1) On ____,the freight bill is presented on the effective day of the shipment.
A) FOB origin shipments
B) collect shipments
C) prepaid shipments
D) FOB destination shipments
E) None of these choices.
Q2) Which of the following is not a risk of unethical behavior by a purchaser?
A) Paying too little for a purchased good or service.
B) Unethical behavior presents a personal risk to a buyer's reputation.
C) A buyer who performs an unethical act runs the risk that the act is also illegal.
D) Sellers quickly become aware of buyers who are open to offers "on the side."
E) Risk to the organization's reputation.
Q3) The purchasing manager/buyer is typically considered to be a general agent for the buying firm (the principal).
A)True
B)False
Q4) Contractual mistakes are covered under the UCC.
A)True
B)False
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Chapter 16: Lean Supply Chain Management
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Sample Questions
Q1) In a pull system,an upstream work center or operation will create output regardless whether a downstream center directly requests that output.
A)True
B)False
Q2) Shortening the material pipeline in terms of time between suppliers and a buyer can reduce the average amount of inventory in a system.
A)True
B)False
Q3) ____ inventory is being moved to a customer or is located throughout distribution channels.
A) Pipeline/in-transit
B) MRO
C) WIP
D) Raw materials and semifinished items
E) Just-in-time
Q4) The most basic and the easiest inventory-related cost to quantify and track is unit cost.
A)True B)False
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Chapter 17: Purchasing Services
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Sample Questions
Q1) Which of the following is not one of the common examples of indirect spend?
A) Professional and consulting services.
B) Employee benefits.
C) Travel.
D) Maintenance, repair, and operating supplies.
E) Production components.
Q2) Private carriers are never used to make "milk runs."
A)True
B)False
Q3) ____ is defined by CSCMP as that part of supply chain management that plans,implements,and controls the efficient,effective forward and reverse flow and storage of goods,services,and related information between the point of origin and the point of consumption in order to meet customers' requirements.
A) Supply management
B) Logistics management
C) Purchasing
D) Transportation management
E) None of these choices.
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Chapter 18: Supply Chain Information Systems and Electronic Sourcing
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Sample Questions
Q1) When companies map what they believe a process looks like,they discover that the actual process is quite different from what they thought it would look like.
A)True
B)False
Q2) A/An ____ is a proprietary network or a data center that supplies hosted services to a limited number of people.
A) social network
B) public cloud
C) microblog
D) mobile cloud
E) private cloud
Q3) A reverse auction is a software tool that extends the tradition bid process to permit suppliers to configure their bids in any number of alternatives ways.
A)True
B)False
Q4) EDI is a highly interactive communications medium.
A)True
B)False
Page 20
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Chapter 19: Performance Measurement and Evaluation
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Q1) Measurement seldom motivates and directs behavior toward desired end results.
A)True
B)False
Q2) A sound measurement and evaluation system provides sporadic or as-needed reporting of performance results.
A)True
B)False
Q3) A performance objective should reflect the realities of the firm's competitive environment.
A)True
B)False
Q4) Transportation costs can be measured only in total dollars and not as a percentage of cost of goods sold or sales revenue.
A)True
B)False
Q5) It is difficult to develop performance improvement plans without understanding the areas in which performance falls short.
A)True
B)False
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Chapter 20: Purchasing and Supply Strategy Trends
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Sample Questions
Q1) Which of the following is not one of the strong soft-side skills for future supply managers?
A) Collaborative working style.
B) Innovative spirit that challenges current approaches.
C) Seeking innovative solutions to problems.
D) Leadership abilities.
E) Cost analytics.
Q2) The supply management leader will act as the chief cost-management officer.
A)True
B)False
Q3) Competition is no longer between fast and agile and slow firms but rather between big and small firms.
A)True
B)False
Q4) Collaboration with suppliers is less frequently identified as an important success factor in achieving competitiveness.
A)True
B)False
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Page 22